Soliciting manufacturers for the production
Soliciting a manufacturer for the work being outsourced is one of the most decisive parts of the outsourcing stages. First of all you need to have set the overall goals you want the manufacturing provider to help you achieve for your business. Positive goals include:
- Increased customer satisfaction
- Access to production capabilities and capacity with relevant technology
- Increased competitiveness
- Cost reductions
- Release of capital
- Reduced investment
- Reduced risk
These goals must fit your business’ needs over the life of the relationship. However, when sending an inquiry please keep in mind that manufacturers also have objectives that they need to have fulfilled in taking in a new customer. Soliciting a manufacturing company to build your product has something similar to making a sales pitch to a potential customer. The manufacturing firm needs to be persuaded that the time and effort it will take to produce your product will be worthwhile to him. A manufacturer gets a lot of offers for doing business, but is limited by its production’s output capacity. You may need to introduce the manufacturer your business plan for marketing a successful product that will drive revenue for both you and the manufacturer. The outcome of a successful relationship is shown following.
How to prepare your inquiry to potential manufacturers to make your product
The framework of the business relationship is initiated through the RFP (Request for Proposal). Communicate your expectations and scope of work to potential manufacturers. Let all candidates have the same information and opportunity to provide their best offer. You should give potential production companies an explicit set of requirements, an explicit way forward, and if necessary an explicit desire for innovation and creativity. Do not tell product manufacturers how to do their jobs, but instead inform them of what needs to be done. The following explains your requirements and is giving potential manufacturers the information they need to prepare a bid:
- A general description of your business and the processes involved (what makes your product special)
- Product requirements with a description (formula, ingredients, certifications, etc.)
- Quantities and order size (first order and expected growth potential in the future so that the manufacturer can understand the magnitude of the volume and the amount of effort required)
- What tasks are to be performed (are there any special things to pay attention to during production)
- The level of performance and service required (which support do you need)
- Share the time-line
- Fee structure options you want to be considered
You can also communicate your evaluation criteria where you inform the bidding manufacturers of those factors that will drive your choice of provider including cost, their ability to meet established metrics, their experience and their strengths.
A very important point to remember is that it must be comprehensive, clear, and honest. Share as much information as you can. That is the only way you will receive clear, comprehensive and honest proposals in return and it will avoid misunderstandings later in the contract’s lifetime. If you and the manufacturer are discovering information about each other during the term of the contract, the outsourcing venture does not stand in a good light. This may happen if you are not up-front in the very beginning.
The next move is to send your inquiry to potential manufacturers. After you have developed a shortlist of potential manufacturers you can decide which of them you want to contact. On our platform you can search for manufacturers and compile an initial list of candidates. You can identify the capabilities of each company from the list by using our search filter. Then you can contact them via Email or make a call to talk about your business, product request and initial expectations. We also have set up an inquiry form that guides you along sending an inquiry out to relevant manufacturers and they will then get back to you.
After you receive offers you need to choose a suitable manufacturer. How to evaluate the responses is discussed here…
Besides, you may also want the manufacturing company to sign a non-disclosure agreement before seeing your product to protect your formula or design. It is also relevant that you have researched your competitor’s products if you might infringe patent rights.